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GHB has a long history as a sleep aid, nutritional supplement, and recreational drug. In the 1980s research studies indicated that it was helpful as a treatment for narcolepsy,[2] and in 2002 the company Orphan Medical was approved by the FDA to market GHB as a treatment for narcolepsy with cataplexy.[3]Jazz Pharmaceuticals, which acquired Orphan Medical in 2005, is currently conducting Phase III clinical trials to evaluate sodium oxybate for the treatment of fibromyalgia as well, based on clinical trials showing that it reduces pain and disability associated with the disease.[4] Xyrem is currently marketed in the United States by Jazz Pharmaceuticals.

Xyrem is an orphan drug, meaning that the U.S. government recognizes it as worth developing even though the condition it treats is relatively rare. Orphan Medical received special incentives from the U.S. government for bringing it to market, in order to help them recoup the costs of testing. In this case Orphan Medical did not have any development expenses, since GHB is inexpensive to synthesize and was already recognized as a potential narcolepsy treatment. They did, however, need to gather extensive information demonstrating that the drug was safe, as well as showing low potential for addiction or tolerance when used under a doctor's supervision. They are also required to operate a distribution program that tightly controls who can receive Xyrem and under what circumstances.[5] Xyrem is distributed directly from the manufacturer and cannot be accessed by licensed pharmacists. It is therefore more tightly controlled than other drugs on Schedule III, and even some on Schedule II.

Xyrem is also the only drug to be on two drug schedules at once under U.S. law: GHB is on schedule I, meaning that it is considered a highly dangerous and addictive drug with no medical uses, but GHB marketed as Xyrem and prescribed for specific conditions is on schedule III, which includes many drugs considered safe when used properly. This is unusual because the schedule system is built around the assumption that a drug's risks are due to the chemical itself, without reference to the user or the circumstances of its use. However, the government cites pragmatic reasons for the distinction: recreational drugs are often of unknown origin, may contain contaminants, and are difficult to take at a precise dose, while the same substance in prescription form is easier to use as intended. The involvement of a doctor also helps reduce the risk of dependency or of recreational, rather than medical use.[6][7] This is similar to the justification for offering THC under schedule III, while marijuana is schedule I, but it differs in that pharmaceutical THC (referred to as Marinol or dronabinol) is a pure version of one of the many active chemicals in marijuana, whereas GHB and Xyrem are chemically identical.

In 2007, the makers of Xyrem, Jazz Pharmaceuticals, pleaded guilty to a felony charge of marketing Xyrem for unapproved uses. These off label uses included treatments for conditions such as fatigue, pain and psychiatric disorders.[8]

The lawsuit claimed that the manufacturers:

Sponsored events where speakers bombarded the doctors with the message that Xyrem should be used to treat a variety of medical conditions;

Paid unrestricted grants to physicians as a reward or inducement to prescribe Xyrem for off-label purposes;

Paid speaker fees to doctors who promoted the use of Xyrem for off-label purposes, such as insomnia and psychiatric disorders.

A sales manager, David Tucket, also pleaded guilty to a felony charge of introducing a misbranded drug into interstate commerce.

One physician, Dr Peter Gleason, was also prosecuted. He admitted to giving speeches and seminars where he did 'not follow evidence-based guidelines', instead making claims such as "table salt is more dangerous" than Xyrem. He was paid over $100,000 in one year by Jazz Pharmaceuticals for giving the talks.[9]

Although GHB can be synthesized easily, from inexpensive chemicals, the price for Xyrem is high, and many insurance plans do not cover it. Jazz Pharmaceuticals does not publish a price, but one insurance company reports it at ~$730/month,[10] but may cost well over $1,000/month. For potential reasons for the high cost, see the discussion of Xyrem's orphan status, above. Jazz Pharmaceuticals operates an assistance program, to make the drug available at reduced cost for certain individuals. The program is administered by the National Organization for Rare Diseases (NORD).[11]

Like most newly-approved drugs, Xyrem is produced by only one manufacturer, which is also the only approved retailer. Thus, the price is not likely to drop due to competitive pressure.

Xyrem is available by prescription only through a restricted distribution program, called the "Xyrem Success Program". This resticted program was implemented due to safety concerns associated with the use of Xyrem.[12]

The program involves many risk management components, such as:

Physician education

Registration

Patient education

Detailed patient surveillance

The program includes a single centralized pharmacy with a toll-free number.